There’s 3 speed humps coming for this stage of the Brexit saga
As mentioned earlier, the important part of any text is that any customs arrangement has a defined end date or a UK controlled exit lever. It also needs to eject the whole of the UK and not leave Northern Ireland dangling. Any detail on future trading relationships etc will be an added bonus. Anything other than that will get shot down by the Cabinet first and there won’t be a cat in hell’s chance of it passing parliament.
2.The Cabinet approves it
That will be a positive, if it’s unanimously agreed by the Cabinet. Any wavering by some members will be seen negatively and again, bring doubt over it passing through Parliament. Failing here will be a big negative but not the end of the story. We’ll kiss a Nov summit goodbye but that will bring the negotiation teams back and working for the Dec summit.
The clincher. If we get passed one and two with flying colours there will be a huge amount of pressure on Parliament to vote the deal through. All the threats, all the big talk, all the grandstanding by every talking head so far will count for nothing. They will now have the responsibility of turning their big mouths into actions. It will be a key moment to see whether politicians make or break Brexit. The question will be to see how many prior detracting ministers fold when faced with that responsibility. If they vote it through, hold on to your hats as the pound will fly. If they knock it back, the pound will crumble as that virtually puts us back to square one.
As with everything regarding Brexit, you can’t be complacent with any one position. We’re always one headline from success and one headline from failure. We could just as easily be at 1.35 tomorrow as we could at 1.2500. That’s the nature of this beast. If ou’re in GBP trades and are short, you’re facing a very stiff wind right now so make sure you’re covered for any topside blow out. If you’re long from down below, protect your profits and any loss the same way.
For my longs, I’m going to be bringing my stop right up either later tonight or tomorrow, just to protect against a worst outcome.
Update: Just one last important thing to note. The vote in Parliament is not a bill vote or even legally binding. That’s why it’s been labelled as a “meaningful vote”. In reality, it counts for nothing and May could ignore it. It will lead to fireworks if she does but I’m just highlighting that it’s not a vote that enshrines anything in law.